Boeing has reportedly resumed production of its 737 Max aircraft at its Renton factory in Seattle, Washington, a little more than a month after a seven-week strike by 33,000 unionized factory workers concluded with a new contract. This marks a critical step in the company's recovery efforts during a particularly turbulent year.
Reuters was the first to report on Boeing's restart of production of its best-selling commercial jet. According to three sources familiar with the situation, production at the Renton factory resumed last Friday.
Production resumed on Friday, said one of the sources, who all spoke on condition of anonymity because they were not authorized to speak with media. Boeing declined to comment. -RTRS
Analysts at Jefferies forecast that Boeing will likely average around 29 737 Max jets per month in 2025, falling far short of the company's pre-restriction goal of 56. Earlier this year, the FAA capped 737 Max production at 38 per month due to safety vulnerabilities within Boeing's production line at Renton.
Two Max crashes, Covid travel downturn, supply chain snarls, financial challenges, and multiple Max jet incidents — including a door panel blowout on an Alaska Airlines 737 Max 9 — have been mounting headwinds for the struggling planemaker. On top of this all, a seven-week strike sent the company to the brink of a devastating stall.
The good news is that Boeing is under new leadership, with newly appointed CEO Kelly Ortberg dismantling disastrous DEI initiatives and shifting the focus to safety as the era of wokeism comes to an abrupt end.
As of mid-November, Goldman's Noah Poponak and Anthony Valentini still had a "Buy" rating on the planemaker with a 12-month price target of $200.
"Our 12-month price target of $200 is derived from targeting a 4.5% free cash flow yield on 2026E free cash, discounted back one year at 12%. Key risks: (1) the pace of air traffic growth, (2) supply chain ability to ramp-up production, and (3) contract operating performance within the defense segment," the analysts said.
Shares of Boeing were up 1% to $158 handle in premarket trading. However, on the year, shares were down 40%. Shares have been locked in a multi-year lateral between $100 and $250 following the Max jet crashes
FAA Administrator Mike Whitaker recently told Reuters that he wouldn't be surprised if it took the company a couple of months to ramp production at Renton to the FAA's production limit.
